2014 budget likely to be delayed

Jan. 6, 2013 - 02:59PM
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The Obama administration’s release of its fiscal 2014 budget request likely will be delayed well past its early February due date.

“I fully expect it to be late,” said Thad Juszczak, a former federal budget officer, who predicts the delay will likely run into March. Another former federal official, who asked not to be named because he was citing sources within the government, confirmed that agencies are anticipating a March submission date.

Officially, no decisions have been made on timing. But an administration official, who spoke on condition of anonymity, said the Office of Management and Budget has yet to inform agencies which of their 2014 budget requests will be granted or rejected. OMB details its decisions on agencies’ budget requests in documents called “passbacks,” which usually go to agencies in late November.

While agencies can appeal OMB’s decisions, the passback is a critical juncture in the run-up to release of the budget request. Delay “is almost unheard of except in years when you have a change in presidents,” said Phil Joyce, a former Congressional Budget Office staffer who now teaches public policy at the University of Maryland.

An OMB spokesman did not respond to a query late last week on when the passbacks could come.

For the Defense Department, the delay contributes to a “terrible confluence” of events, said Gordon Adams, who served as OMB associate director for national security and international affairs from 1993 to 1997. The department’s passback usually runs 10 to 15 pages and can affect decisions on matters as basic as aircraft production rates, he said. On top of the late feedback from OMB, the Pentagon faces another $2 billion budget cut this year under the “fiscal cliff” legislation approved last week and the possibility of far steeper reductions if sequestration takes effect in March.

“If I were [DoD Comptroller] Robert Hale, I’d be tearing my hair out right now,” Adams said.

Hale was not available for comment late last week. In a statement, Defense Secretary Leon Panetta asked for budget stability. “The shadow of sequestration has cast a shadow over our efforts,” Panetta said.

On Thursday, Pentagon spokesman George Little did not rule out submitting the department’s budget next month, “but we need to define what the timeline is in the coming days and weeks.”

At the Nuclear Regulatory Commission, officials at this point would normally have wrapped up work on the budget numbers, Chief Financial Officer Jim Dyer said in an interview. This year, the commission is still awaiting OMB’s response after sending over its proposed fiscal 2014 budget in September, Dyer said. Because the agency doesn’t have any multiyear acquisition projects, the delay isn’t having any practical impact, he said.

OMB isn’t saying when the passback might come, however.

The administration’s budget request is due on Capitol Hill by the first Monday in February, which this year is Feb. 4. But delays are not unusual. Last February, the White House postponed release of its fiscal 2013 request by a week, citing the need for time to make final decisions and work out technical details.

One complicating factor plaguing the 2014 budget process is the lack of a budget baseline for the current fiscal year. Federal agencies are operating on a six-month continuing resolution that expires March 27. It is unknown whether Congress will approve a fiscal 2013 appropriation for the remainder of the year or simply extend the CR.

The White House could instead rely on the proposed figures in last year’s submission or simply adopt the budget levels of the current CR as its 2013 baseline, according to Juszczak and other analysts.

Joyce, the former CBO official, sees the passback delay as the latest in a cascading series of dominoes that underscore the dysfunction afflicting the budget process. “In a sense, it has never operated worse than it is right now,” he said.

Continuing resolutions have become the norm. In his five years on the job at the NRC, Dyer said the earliest he has seen a full-year appropriation is December.

This year, the uncertainty is aggravated by the specter of sequestration, as across-the-board budget cuts are formally known. Those cuts, originally supposed to take effect last week, are required under the 2011 Budget Control Act because lawmakers failed to come up with a long-term deficit-reduction path.

Last month, OMB attributed the passback delay to the potential need for “adjustments” based on negotiations with Congress to avert the sequestration cuts. But the legislation signed last week only pushed back the possibility of sequestration cuts another two months.

The inability to plan budgets carries a steep price, Joyce found in a report last year. Under continuing resolutions, for example, agencies often resort to short-lived contracts that may run from week to week. They also have to continue services that have outlived their effectiveness, while delays in maintenance and other activities may bring higher costs later on. One contractor reported getting a one-month base contract with 59 one-month options to accommodate the unpredictability associated with continuing resolutions.

“The paperwork cost, for the government and the contractor, of such an arrangement is substantial,” Joyce said. He urged Congress to prohibit itself from using continuing resolutions. Although that route raises the risk of a government shutdown, it also “turns up the heat” on lawmakers to approve full-year spending bills, he said in the report, published by the IBM Center for The Business of Government.

At the NRC, Dyer acknowledged the extra work posed by recurrent continuing resolutions.